Bihar Chamber of Commerce v. Bihar State Electricity Board
1992-05-22
R.M.PRASAD, S.C.MOOKHERJI
body1992
DigiLaw.ai
Order With consent of parties all these writ applications in which common questions are involved have been heard together, in detail, for their disposal at the admission stage itself. 2. In all the applications the challenge to the various provisions of the revised tariff notified by the Bihar State Electricity Board, Patna (hereinafter referred to as ‘the Board'), vide Notification No. COM/TAR-1010/90-181 dated 26th August, 1991, in super-session of the earlier notification dated 17th June, 1983 has been made. The impugned notification is purported to have been issued in exercise of the powers conferred under sections 46 and 49 of the Electricity (Supply) Act, 1948 (hereinafter referred to as 'the 1948 Act'), with the approval of the State Government. By this various changes have been made with regard to high tension service consumer, low tension service consumer, domestic consumer and commercial consumer. The petitioners have challenged only the validity of formulation of tariff applicable to high tension service-I consumer (in short 'HTS-I') and low tension industrial service consumer (in short 'LTIS') such as, clause 15.2, 16.2(d), 16.6(f) & (g), 16.7(f), 16.8, enhancement in the demand charges with regard to High Tension Service (H.T.S.I.) and tariff of Low Tension Service. 3. In short, the points of attack are that (i) the tariff notification has to be published in the gazette and the Board being a delegate of powers is not entitled to make its tariff retrospectively effective unless the statute specifically empowers it to do so and as such clause 2 of the impugned notification so far it makes the tariff effective from 1.8.1991 is illegal and unauthorised; (ii) the changes in the tariff made are arbitrary, illegal and against the principle laid down in section 49 and other provisions of the Act unjustified, not commensurate with the quality of service provided inasmuch as the voltage supplied is much below the prescribed standard besides the supply being intermittent causing considerable damages and injury; (iii) the change in the minimum guarantee is unilateral even though there is no change in the p1ant and machineries used in manufacturing programme; and (iv) the action of the Board in raising of the bill on that basis, being a monopoly supplier amounts to realisation of electricity charges from the consumers forcibly and the same thus is in violation of Articles 14 and 19 of the Constitution of India. 4. The petitioner no.
4. The petitioner no. 1 is a Company incorporated under the Indian Companies Act and has been established for the purpose of promoting and protecting the trade, commerce, industry and manufacturers of India and in particular of Bihar and to take all appropriate steps relating thereto whereas the other petitioners are either a Company or partnership firm/establishment dealing in production of various items, such as, flour, paper, craft papers, alloy castings etc. and/or running their mills. So far as the petitioners of C.W.J.C. No. 7427 of 1991 are concerned, they are unemployed graduates and have established a small scale industry with their own resources and financial assistance from other financing institutions and manufactures wire drawing products. 5. The case of the petitioners is that the Board being a State within the meaning of Article 12 of the Constitution, is an instrument or the State discharging the duties and functions as such. From time to time it had formulated electricity tariff in accordance with section 49 of the 1948 Act; the one being vide its Notification No. COTAR-1010-/82-358 dated the 17th of June, 1983, before the impugned revision. 6. Section 49 of the Act is quoted below: "49. Provision of the sale of electricity by the Board to persons other than licensees.-(1) Subject to the provisions of this Act and of regulations, if any made in this behalf the Board may supply electricity to any person not being a licensee upon such terms and conditions as the Board thinks fit and may for the purposes of such supply frame uniform tariffs. (2) In fixing the uniform tariffs, the Board shall have regard to all or any of the following factors, namely :- (a) the nature of the supply and the purposes for which it is required; (b) the coordinated development of the supply and distribution of electricity within the State in the most efficient and economical manner, with particular reference to such development in areas not for the time being served or adequately served by the licensee; (c) the simplification and standardisation of mothods and rates of charges for such supplies; (d) the extension and cheapening of supplies of electricity to sparsely developed areas.
(3) Nothing in the foregoing provisions of this section shall derogate from the power of the Board, if it considers it necessary or expedient to fix different tariffs for the supply of electricity to any person not being a licensee, having regard to the geographical position of any area the nature of the supply and purpose for which supply is required and any other relevant factors. (4) In fixing the tariff and terms and conditions for the supply of electricity, the Board shall not show undue preference to any person." 7. As regards the first objection the learned Counsel for the petitioners submitted that clause 2 to new tariff provides that it shall take effect from the Ist August, 1991, when the tariff itself has been framed on 26-8-1991 (Annexure 1). Further, it is submitted that this can only be made effective from the date when it was published in Bihar Gazette (Extraordinary) dated September 20, 1991 inasmuch as the Board being a delegatee of powers is not entitled to make its tariff effective retrospectively unless the statute specifically empowers it to do so which is wanting. The learned Counsel, accordingly submitted that neither any provision of the 1948 Act nor of sections 46 and 49 of it whereunder the power is purported to have been exercised by the Board in framing the new tariff authorises the Board to make the tariff effective retrospectively and, therefore, clause 2 to that extent is illegal and unauthorised as the framing of tariff is akin to making of rules and regulations by delegatee of powers conferred by a statute. 8. On the other hand, the learned Counsel for the Board submitted that there is no requirement in law that it should be effective from the date of publication in the Gazette and, therefore, in absence of any such provision in new tariff effective from a date prior to the date of notification or its publication in the Gazette. According to him, as recording of the consumption goes on but billings are done later, there cannot be any question of retrospectivity as has been sought to be made out by the petitioners. We feel difficulty in accepting this contention of the learned Counsel for the Board. 9.
According to him, as recording of the consumption goes on but billings are done later, there cannot be any question of retrospectivity as has been sought to be made out by the petitioners. We feel difficulty in accepting this contention of the learned Counsel for the Board. 9. The Supreme Court in Hukum Chand vs. Union of India reported in A.I.R. 1972 S.C. 2427, while dealing with the underlying principle, observed that unlike Sovereign Legislature which has power to enact laws with retrospective operation, authority vested with the power of making subordinate legislation has to act within the limits of its power and cannot transgress the same and, accordingly, held that in the facts of that case that in absence of any such power, the Central Government acted in excess of power so far as it gave retrospective effect to the Explanation of rule 49. Here. in the present case also, more or less the power vested under section 49 of the 1948 Act in the Board for fixing uniform tariff, in our opinion, is like making subordinate legislation and that being the position, in the absence of any such power allowing the Board to make the tariff effective retrospectively, clause (2) of the impugned notification to that extent is bad in law and could only be made effective from the date it was published in the gazette and it is held accordingly. 10. Now, we take up the other points raised. According to the petitioners, the earlier tariff applicable to the industry were of two types, namely, (i) demand charge, i.e., K.V.A. charge and (ii) unit consumption charge, i.e., kilowatt per hour i.e., K.V.H. charge. Clause 15.2 of the impugned notification provides the rates of "Minimum Base Charge" popularly known as "Minimum Guarantee Charge". This charge is confined to the consumers in the category of High Tension (both HTS I and HTS II), Extra High Tension and Railway, Traction Service. In the instant case, we are only concerned with the consumers of HTS I category In the preceding tariff also, the clause in this regard was 15.2 and was applicable to same three categories of consumers. 11. The grievances raised against the aforesaid clause 15.
In the instant case, we are only concerned with the consumers of HTS I category In the preceding tariff also, the clause in this regard was 15.2 and was applicable to same three categories of consumers. 11. The grievances raised against the aforesaid clause 15. 2 of the new tariff are that the formula of calculating minimum guarantee has been changed with a view to increase it substantially as earlier the formula was "contract demand x load factor x power factor x hours in a day x days in a year" but now the change brought in is with regard to power factor which was earlier 80 by enhancing it to 85. Elaborating this part of the contention it is said that in the past for a contract demand of 100 KVA. the total units per year was 1,75,200 KWH but, under the new tariff, it will be 1,86,150 KWH or units, in this way under old tariff it was (i) 100 x. 25 x. 80 x. 24 x 365= 1.75,200 KWH whereas, according to new one, it comes to 100 x. 25 x. 85 x. 24 x 365 = 1,86, 150 KWH. By placing this calculation, it is said that the same consumer under the new tariff has now to pay for 10,950 units in excess every year without any additional facility in the matter of availability of electricity. The object of minimum guarantee charge, according to him, is that the Board generates electricity and the consumers give guarantee that in the event of their failure to consume the electricity so supplied they shall be liable to pay guarantee charges, as for the sale object behind it is that for the capital investment made by the Board for generation and distribution of electricity, it has to be compensated for keeping its apparatus ready for supply of electricity but, in Bihar, the position is that although the Board has installed capacity on paper of generating 1725 Mega Watts of electricity per day, its actual generation is not even more than 400 Mega Watts on an average per day but still then it has entered into contracts with the consumers in the State to supply 2480 Mega Watts of electricity. It is further stated that even if discount is made for factors, like peak hours consumption, holidays, closures etc.
It is further stated that even if discount is made for factors, like peak hours consumption, holidays, closures etc. the Board has hardly 16% of the contracted amount of electricity in readiness for supply to the consumers and therefore the indirect in crease in the minimum guarantee units by increasing the power factor from. 80 to 85 is a colourable exercise of power to extract money from the consumer, for electricity neither generated and supplied by the Board nor consumed by the consumer. In this• connection the details mentioned in paragraph 15 of C.W.J.C. No. 8214 of 1991 and in paragraphs 40 and 41 of C.W.J.C. No. 8703 of 1991 have been referred to. 12. It has, therefore, been contended on behalf of the petitioners that the very principle of minimum guarantee is founded upon the object that (a) there should be constant supply of electrical energy for the entire 24 hours at a certain pressure and on three phases, (b) the consumer (s) is/are obliged to consume the said energy and (c) in the event of their failure to do so, the Board shall not be held responsible and be entitled to charge minimum guarantee. 13. Mr. Sinha, learned Counsel for the petitioner in C.W.J.C. No. 7427 of 1991, in addition to above, has submitted that the Board is incurring heavy loss due to much higher consumption of oil, coal and low plant load factor of their generating station, as a result of which the generation costs have gone up on the higher side and now in order to compensate this loss, for which the Board is only responsible, the consumers are penalised by introducing a new provision, thereby, additional financial burden has been put on them. In this connection, para 5 of the reply to the affidavit in C.W.J.C. No. 7427 of 1991 wherein details of the oil consumption of the generating stations of the Board as against of the neighbouring States have been referred to. In paragraph 6 of the said reply, the petitioner stated that the coal consumption of the Board is O. 93 KG per unit, against All India Average of O 6 KG pet unit and, in paragraph. 7, it is stated that the load factor in Bihar is 30% as against 55% of All India Average.
In paragraph 6 of the said reply, the petitioner stated that the coal consumption of the Board is O. 93 KG per unit, against All India Average of O 6 KG pet unit and, in paragraph. 7, it is stated that the load factor in Bihar is 30% as against 55% of All India Average. It is, accordingly, stated that as no explanation has been given by the Board with regard to the aforementioned facts, the same stand un-rebutted and, therefore, the figures given leave no room for doubt that the Board is not making supply and distribution of electricity within the State in the efficient and economical manner. 14. Mr. Reddy, learned Counsel for the Board, on the other band, has submitted that the tariffs for high tension and low tension consumers have been framed precisely within the parameters of sections 49 and 59 of the 1948 Act and, in any event, the Board, in case of default in supply, has made provisions for claiming proportionate remission by the consumers which the Board entertains. He further submitted that the stand of the petitioners is not correct which is apparent from the provisions of clause 15. 2 (b) of the new tariff and referred to the same. It is relevant at this stage to quote the said provision:- (i) For 11 KV/6.6. KV 3.3 KV Service (HTS-I)-Energy charge based on load factor of 25 percent and power factor of 85 percent on contract demand shall be payable at the rate of 110 paise per unit. (ii) For 33 KV Service (HTS-II) Energy charged based on load factor of 30 percent and power factor of 85 percent on contract demand, shall be payable at the rate of 104 paise per unit. (iii) For 132 KV Extra High Tension Service (E.H.T.S.) Energy charge based on load factor of 50 percent and power factor of 85 percent on contract demand shall be payable at the rate of 107 paise per unit. (iv) For 132 KV/25 KV Railway traction Service (RTS) Energy charged based on load factor of 25 percent and power factor of 85 percent on contract demand shall be payable at the rate of 122/130 paise per unit respectively. Thus, according to Mr.
(iv) For 132 KV/25 KV Railway traction Service (RTS) Energy charged based on load factor of 25 percent and power factor of 85 percent on contract demand shall be payable at the rate of 122/130 paise per unit respectively. Thus, according to Mr. Reddy, in terms or above, it will be clear that the Board has placed itself under an obligation to supply power for 182 hours 30 minutes per month in relation to 11 KV consumers, 219 hours in relation to 33 KV consumers and 365 hours per month for 132 KV consumers inasmuch as out of 24 hours a day 25% of the same is only being made the basis of calculation of the minimum guarantee charge from the consumers. Further, he submitted that in case of any shortfall in power supply under certain exigencies, as mentioned in clause 13 of the agreement, the consumers will be entitled for proportionate remission. 15. In order to appreciate the contentions raised by the parties, clause 13 of the agreement is quoted hereunder: "If at any time the consumer is prevented from receiving or using the electrical energy to be supplied under this agreement either in whole, or in part due to strikes, riots, fire, floods, explosions act of God or any other case reasonably beyond control or if the Board is prevented from supplying or unable to supply such electrical energy owing to any or all of the clauses mentioned above then the demand charge and guaranteed energy charge set out in the schedule shall be reduced in proportion to the ability of the consumer to take or the Board to Supply such power and the decision of the Chief Engineer, Bihar State Electricity Board, in this respect shall be final." 16. Learned Counsel for the Board also submitted that keeping in view the inflation rate, the revision in tariff after eight long years can not be characterised as unreasonable and arbitrary. He further submitted that no doubt the price fixation is open to judicial review, but in a situation where it is unreasonably excessive and not based on any intelligible criteria.
Learned Counsel for the Board also submitted that keeping in view the inflation rate, the revision in tariff after eight long years can not be characterised as unreasonable and arbitrary. He further submitted that no doubt the price fixation is open to judicial review, but in a situation where it is unreasonably excessive and not based on any intelligible criteria. In this regard referring to the tariff prevailing in other States, like Karnataka, Maharashtra and Orissa, where the power factor is 0.85 and 0.90 respectively, he stated that in Bihar also under the new tariff, it has been fixed at only 0.85 on contract demand for HTS-I AND HTS-II Service which cannot be said to be unreasonable as the same is in consonance with Rule 27 of the Indian Electricity Rules, 1956 read with clause 22 (k) of Annexure VI of the said Rule. 17. In reply to this, the learned Counsel for the petitioners submitted that undisputedly the effect on the increase in the power factor in the new tariff from 0.80 to 0.85 is that the consumers have to pay for 10,950 units per year by way of excess minimum guarantee charge, besides 5% mote in total bill every month which includes demand charge, fuel charge and fuel surcharge. It was also submitted that it is not justified for the Board to compare the tariff prevailing in some other States, with that of Bihar, by suppressing the fact that power factor depends on the plant load factor of the Thermal Power Station or the Board as in a State where power factor is 0.85 or even higher, the plant load factor is also much above. In this connection, it is further stated that the National average in this regard is 56%, whereas in Bihar Stated is only 36 percent with such low plant load factor that the Board has hardly 16% of the contracted amount of electricity in readiness for supply to the consumers and as such the increase in the power factor from 0.80 to 0.85 amounts to increasing the minimum guaranteed units though the Board is not in a position to even supply electricity on the basis of the present power factor. 18.
18. It is true that under section 49 of the 1948 Act, the power has been vested in the Board to supply electricity to any person not being a licensee and for such supply frame uniform tariff keeping in view all or any of the following factors, namely, lay the nature of the supply and the purposes for which it is required; (b) the coordinated development of the supply and distribution of electricity within the States in the most efficient and economical manner with particular reference to such development in areas not for the time being served or adequately served by the licensee; (c) the simplification and standardisation of methods and rates of charges for such supplies; and (d) the extension and cheapening of supplies of electricity to sparsely developed areas. 19. The meaning of the word 'Tariff' as given in Law Lexicon, is that "method of charging for services, e.g., supplies of gas or electricity". From reading of the above provisions of section 49 of 1948 Act, meaning of the word 'Tariff' and the undisputed facts and figures placed it will appear that there has been hardly any development in the supply and distribution of electricity in the State and that too in an efficient and economical manner. 20. Mr. Reddy submitted that the Supreme Court in the case of Bihar State Electricity Board, Patna and others v. M/s Green Rubber Industries and others reported in (1990) I Supreme Court Cases 371 : 1990 (1) PLJR 73 (SC) held that the stipulation to pay minimum guarantee charges irrespective of actual consumption is reasonable and valid. There cannot be a controversy that the term of payment of minimum charge, an agreement for supply of energy, would not be illegal or ultra vires. The Board is, therefore, entitled to put liability to pay the minimum guarantee charges as a condition of supply. In the aforesaid decision, the Supreme Court held the agreement with a stipulation of minimum guarantee charges to be valid considering that the supply of electricity to a consumer involves incurring of overhead installation expresses by the Board which do not vary with the quantity of electricity consumed and the installation has to be continued irrespective of whether the energy is consumed or not until the agreement comes to an end. 21.
21. Learned Counsel appearing for the Board has lastly submitted that one cannot shut his eyes to the various problems like investment, labour problem etc. with which the Board have to face. According to him, non fulfilment of obligation by the Board cannot be a ground of challenge of the revision of the tariff, as the action of the Board is accountable to the people in the House of Legislature only and individual consumer cannot raise such pleas and the High Court should not ordinarily interfere with. We are unable to accept this argument. It is well settled that the tariff is open to judicial review if in view of the facts and figures placed before the Court it is found to be unreasonably excessive and not based on any intelligible criteria. In our opinion, the Board is under statutory obligation to increase the production capacity and bring efficiency in the administration. 22. The very provision as contained in section 49 provides that in fixing the uniform tariffs, the Board shall have regard to all or any of the factors mentioned in the said provision which besides other things includes the coordinated development of the supply and distribution of electricity within the State in the most efficient and economical manner, with particular reference to such development in areas not for the time being served or adequately served by the licensee and the simplification and standardisation of methods and rates of charges for such supplies. In our opinion, the words "shall have regard to" will not mean "shall have no regard". The use of the words "all or any" is colloquial expression. According to Strouds Judicial dictionary, the words all is equivalent to "each and every" meaning thereby without exception and the word 'any' excludes limitation or qualification and is "as wide as possible". If the meaning of the words ''all or any" in present context is held to be any of them, then it will not make any sense. In fact, none of the factors mentioned in sub-section (2) of section 49 can be ignored. We are, therefore, of the view that the capacity of supply has to be judged with the production and not merely by installation. However, if there is shortage in production incidentally, then the matter may be different. 23.
In fact, none of the factors mentioned in sub-section (2) of section 49 can be ignored. We are, therefore, of the view that the capacity of supply has to be judged with the production and not merely by installation. However, if there is shortage in production incidentally, then the matter may be different. 23. According to section 59 of the Act, the Board has been given power to adjust its tariff so as to ensure that the total revenues in any year of account shall, after meeting all expenses properly chargeable to revenues, including operating, maintenance and management expenses, taxes (if any) on income and profits, depreciation and interest payable on all debentures, bonds and loans, leave such surplus as is not less than three percent or such higher percentage, as the State Government may, by notification in the Official gazette, specify in this behalf of the value of the fixed assets of the Board in service at the beginning of such year. Thus, the law provides to adjust tariff which means the method to charge for services, i.e. supply of electricity and not for what may be given in future. Further, the facts stated in reply affidavit filed on behalf of the petitioner that there is also overstaffing in the Electricity Board and the transmission and distribution loss is also highest, have not been denied by the Board. Therefore, it cannot be said that the Board has acted in the most efficient and economical manner in the coordinated development of the supply and distribution of electricity in the State. 24. However, we do not feel inclined to interfere with the increase in the power factor from 0.80 to 0.85 keeping in view the inflation in the last eight years after which the tariff is being sought to be revised. Moreover, minimum guarantee charge is based only on 25% of supply in a day and, in case of failure either on the part of the consumers or on the part of the Board, under certain exigencies mentioned in clause 13 of the agreement, the consumer is entitled for proportionate remission. In any view of the matter, earlier also there was a provision for the power factor in the old tariff.
In any view of the matter, earlier also there was a provision for the power factor in the old tariff. The only difference between the two tariffs appears to be that earlier for unconsumed units no fuel surcharge (which, at that time, was 72 paise per unit) used to be charged whereas under the new tariff the consumer will be liable to pay the fuel surcharge at the rate or 12 paise per unit on consumption of electricity subject to necessary adjustment on the basis of final rate in accordance with the provision of tariff in force. Earlier the consumers had to pay 61 paise (as unit charge) plus 72 paise (fuel surcharge): Rs. 1.33 per unit whereas, under the new tariff, it is Rs. 1.10 plus 12 paise : 1.22 paise per unit. Besides this, there appears to be an annual increase of 10,950 units per year because of the rise in the power factor from 0.80 to 0.85. In our view, this will not have much bearing as, according to the Board, the petitioners will be entitled for proportionate remission in case of any shortfall in power supply either on account of default on the part of the petitioners or of the Board under certain exigencies as mentioned in clause 13 of the agreement. Even assuming that the Board is not in a position to supply the electricity 25% in a day, i.e., for six hours, as guaranteed, then the consumer is entitled for remission under clause 13, as we have already held above. 25. The Supreme Court in Bihar State Electricity Board and another v. M/s. Dhanawat Rice and Oil Mills reported in (1989) 1 S.C.C. 452 : 1989 PLJR 19 (SC) held a consumer to be entitled to proportionate reduction of the annual minimum guarantee bills under the specific clause in the agreement in case the Board fails when the supply of electricity is disrupted by trippings, load shedding find power cuts which is a circumstance beyond the control of the consumer to consume the electricity up to the minimum guarantee. In the case of Bihar State Electricity Board, Patna and others v. M/s Green Rubber Industries and others (supra), the consumer's liability under agreement for payment irrespective of consumption of any electricity till termination of the contract was held to be reasonable and valid. 26.
In the case of Bihar State Electricity Board, Patna and others v. M/s Green Rubber Industries and others (supra), the consumer's liability under agreement for payment irrespective of consumption of any electricity till termination of the contract was held to be reasonable and valid. 26. The third objection is in respect of the basis for the calculation of the energy charge payable monthly instead of annual. It has been contended by Mr. Bajla that it does not give any provision for adjustment of higher consumption. Further, that if the Board has not been able to supply sufficient electricity in one month, still MG Charge will have to be deposited inasmuch as the contention is that there being no uniform supply in every month the Board cannot have any justification to charge minimum guarantee on monthly basis. The other objection to this provision is that instead of solving the problems which the consumers are facing in this regard once in a year, will now have to face with the said problem in each and every month. 27. It is also stated that the very principle of annual minimum guarantee has been founded upon the principle that there should be constant supply of electrical energy for the entire 24 hours at a certain pressure on three phases and the consumer is obliged to consume the said energy and in case of their failure, the Board cannot be held responsible and at the same time will be entitled to charge minimum guarantee. 28. According to the learned Counsel, in terms of clause 13 of the agreement, the consumer is entitled to a proportionate remission under certain exigencies if they are prevented from receiving or using the energy reasonably beyond their control or if the Board is prevented from supplying or unable to supply such electrical energy and, therefore, the monthly consumption depends upon various factors, including the supply given by the Board and that too factually, it is so erratic that even if the petitioners are not in a position to consume the electricity it will be impossible for them to file representation under the aforesaid clause 13 in each month.
It is further stated that some of the industries are seasonal ones and the consumption of the electricity was only for a few months in a year, yet in those cases the minimum guarantee charges will be chargeable for every month, including of the period when their industry will not function which is against the purpose, object and spirit of section 49 of the 1948 Act. 29. Mr. Ram Chandra Sinha, learned Counsel for the petitioner in C.W.J.C. No. 7427 of 1991 submitted that the minimum guarantee charge is itself unjustified as the Board does not have adequate generating capacity and/or resources to arrange power from other sources to justify its action to charge monthly minimum guarantee and that apart the Board compels its consumers of high tension load to make an agreement for contract demand for not less than 75 KVA. It is also stated that many small scale units cannot consume, power to that extent which is also unconscionable as the Board is not in a position to supply to all its H.T. consumers at the contractual rate demand. In this background, according to Mr. Sinha, the unit like the petitioner is unable to make the monthly plan of production which earlier it was able to make up for lost hours in some months when either the raw materials were available or when the electricity supply happened to be more regular and, therefore, the proposed change in the system to minimum guarantee will seriously affect the petitioner and other similarly situated consumers which is not only arbitrary but also unreasonable. 30. Learned Counsel for the Board stated that clause 13 of the agreement provides for grant of remission and monthly basis may help both in correcting the bill with the help of log book entries etc. of that particular month whereas the earlier annual basis of calculation might be one of the factors for delay in disposal of the application for remission. According to him, this system is most logical and the consumer will be at a disadvantageous position if the old practice is followed.
of that particular month whereas the earlier annual basis of calculation might be one of the factors for delay in disposal of the application for remission. According to him, this system is most logical and the consumer will be at a disadvantageous position if the old practice is followed. Further, it is submitted that the monthly basis for calculation of the bill is not arbitrary inasmuch as if there is failure on the part of the Board in making supply of the required electricity in any particular month, the consumer will get remission and the Board cannot make adjustment for the short supply against better supply in other month. 31. In our view, the learned Counsel for the petitioners is right in his submission that the basis for the calculation of the energy charge payable monthly instead of annual is irrational and unreasonable as well. The minimum base charges chargeable earlier were subject to a total adjustment at the end of the year of annual consumption of the units of the installed load irrespective of the fact whether the energy to that extent was supplied and/or consumed or not every month, whereas, now by the introduction of calculation on monthly basis will deprive them of the adjustment of the unconsumed units of electricity In particular month towards the end of the year. It is now bound to lead to great harassment inasmuch as the consumed will have to bear the whims and mercy of the officers of the Board who in one month may supply adequate energy though not required by the consumers in that particular month, yet they will have to pay the minimum base charge of that particular month, whereas, in another month, the Board may not be able to supply adequate energy which would deprive the consumers who may be very much in need of utilising the adequate energy. In other words, for the unconsumed early supplied by the Board because of non-requirement in a particular month, the consumers will be deprived of getting adjustment of the same against the consumption by them in other months.
In other words, for the unconsumed early supplied by the Board because of non-requirement in a particular month, the consumers will be deprived of getting adjustment of the same against the consumption by them in other months. We have already held that the Board appears to be not in a position to supply electricity for which they have already entered into agreement and, thus, in our opinion, it will not be proper to calculate the energy charge paid monthly instead of annually which will deprive the consumers of claiming adjustment of the unconsumed unit in a particular month as against the consumption of excess units in other months. This will rather put them in disadvantageous position especially when we declined to interfere with the increase of the power factor. In view of the above, the submission of the learned Counsel for the Board that this system is most logical and the consumers will be at a disadvantageous position if the old system is restored has no substance. For some industries which are seasonal industries and the consumption of the electricity is only for a few months in a year the introduction of monthly system is bound to ruin them. For example, the Board may have sufficient energy during the off season for aforementioned seasonal industries when they may not require the energy but still they will have to pay, whereas the Board may not have sufficient energy for supply to such industries when they require. In this way, the Board may also be looser became had the provision for annual calculation and adjustment would have continued the consumer may not have claimed remission on the monthly basis. Thus, there is no scope but to hold that the system of calculation on monthly basis introduced under the new tariff is irrational and unreasonable as well. 32. The another challenge to the tariff on behalf of the petitioners is that the increase of maximum demand charge from Rs. 35/- per KVA to Rs. 98/- per KVA i.e. an increase of 280% is excessive and wholly arbitrary. Further, it was contended that earlier the hike in the maximum demand charge has never been so high. In support of this, the details of earlier increase in M.D. charge have been stated as follows : Tariff dt. 14.3.66 Rs. 12.00 per KVA Tartff dt. 1.3.68 Rs. 13.50 per KVA Tariff dt. 28.6.70 Rs.
Further, it was contended that earlier the hike in the maximum demand charge has never been so high. In support of this, the details of earlier increase in M.D. charge have been stated as follows : Tariff dt. 14.3.66 Rs. 12.00 per KVA Tartff dt. 1.3.68 Rs. 13.50 per KVA Tariff dt. 28.6.70 Rs. 14.00 per KVA Tariff dt. 25.7.75 Rs. 20.00 per KVA Tariff dl. 6.4.79 Rs. 23.00 per KVA Tariff dt. 20.10.81 Rs. 26.80 per KVA Tariff dt. 17.6.83 Rs. 35.00 per KVA 33. We do not find any substance in this submission. Keeping in view the inflation in the last over eight years, the increase in M.D. Charge is not excessive. Be that as it may, even from a perusal of the aforesaid rate of increase from time to time and especially from the last one it is cleat that it about one year and eight months the increase was by Rs. 8.00. Thus, even assuming on that basis in about nine years when the new tariff is being sought to be introduced the increase would be by Rs. 43.20, i.e., Rs. 35.00+Rs. 43.20=Rs. 78.20. From the above it would appear that there is hardly a difference of Rs. 20.00 per KVA, which in view of the increase in the price index which has gone up exorbitantly cannot be said to be unjustified. We do not, therefore, find the increase of the maximum demand charge from Rs. 35.00 per KVA to Rs. 98.00 per KVA to be unreasonably excessive or arbitrary. 34. The next point that has been raised on behalf of the petitioners is that for the first time the Board has made it obligatory for all consumers to instal capacitors to improve their power factor although under section 26 of the Indian Electricity Act, 1910, the obligation is of the Board to provide the consumer with a meter for measuring the consumption of electricity. It may be indicated that 'Capacitor' is an apparatus for measuring and improving the power factor. According to the petitioners, the Board now wants the consumers to install such an apparatus which may help them in maintaining its power plants, sub-stations and feeder stations etc. and, further, submitted that the whole attempt of the Board in introducing this provision is to shift its obligations and responsibilities upon the helpless consumers. 35. On the other hand, Mr.
According to the petitioners, the Board now wants the consumers to install such an apparatus which may help them in maintaining its power plants, sub-stations and feeder stations etc. and, further, submitted that the whole attempt of the Board in introducing this provision is to shift its obligations and responsibilities upon the helpless consumers. 35. On the other hand, Mr. Reddy for the Board submitted that the provision for installation of capacitor has been made only in order to maintain the rigour of discipline and it is not a clause relating to revenue earning. In fact, it has been introduced just to ensure that an effective device is provided to prevent wastage of electricity as also to prevent spoiling damaging of the instruments used by the consumers and the Board. This, according to Mr. Reddy, will be more in the interest of consumers than that of the Board. He further submitted that if something goes wrong with any equipment it will be again a burden on the consumers inasmuch as a capacitor has an important role to play in extending protection to the equipment installed by the consumers which has a scientific basis and beneficial too for the consumers in order to prevent loss of electrical energy as also to maintain efficiency of the entire distribution system, including the consumption, and, therefore, an erring consumer with defective machines and improper consumption system having low power factor cannot be permitted to hold the entire distribution system to ransom and, as such the installation of capacitors by the consumer like in other States has rationale behind it and not an arbitrary action on the part of the Board. 36. In view of this submission, the only question which falls for consideration is whether the installation of the meter as contemplated under section 29 of the Indian Electricity Act 1910, includes the capacitor and that whether there is any rational in introducing the provision regarding installation of capacitor or it is an arbitrary action. Section 26 of the Indian Electricity Act, 1910 provides for ascertaining the amount of energy supplied to a consumer by means of a correct meter which is supplied by the licensees to the consumers for which the licensee may require the consumer to give him security for the price of the meter. In this provision, an option has been given to the consumers to purchase a meter.
In this provision, an option has been given to the consumers to purchase a meter. The function of the capacitor is entirely deferent from the meter. It is not in dispute that the function of the capacitor to check the loss of electrical energy and thereby to maintain the efficiency of the entire distribution system. Therefore, the submission of the learned Counsel for the petitioners that the obligation to instal a capacitor is on the Board/licensee and not on the consumers is not sustainable. Besides this, the whole system has to work and cannot be compelled to sacrifice other consumers only for the interest of the individual and/or for the interest of the industrial consumers. In our opinion, the necessity to instal a capacitor is very much there and will be in the interest of the consumers inasmuch as a defective capacitor may damage not only the Board's equipment but also the equipments of the consumers. 37. Moreover, from paragraph 29 of the counter affidavit it appears that the provision regarding the installation of capacitors has been in existence since 1979, which fact has not been disputed by the petitioners. As regards the surcharge for non-providing capacitors, it is merely a means to ensure that capacitors are installed and maintained at the pain of provision for surcharge without disconnecting the line itself. The consumers can very well save themselves from the surcharge by complying with the provisions regarding installation and maintenance of the capacitors. We, therefore, do not find that the requirement for installation of capacitors is an unreasonable one. 38. It was also argued on behalf of the petitioners that sub-clause (d) of clause 16.6 confers further draconian power on the Board. On the one hand, requiring the consumers to instal capacitor manufactured by the standard manufacturers of ISI specifications and, on the other, the Board has reserved power in it to refuse any new connection about 3 H.P. unless such capacitors are installed to its satisfaction. According to the learned Counsel, the very requirement of ISI specification makes the capacitors compulsorily of standard quality and nothing should remain for the satisfaction of the Board. The submission is merit-less. The satisfaction is not with respect to installation of capacitors manufactured by the standard manufacturers marked by ISI specifications. The satisfaction under sub-clause (b) is with respect to installation of appropriate ratings.
The submission is merit-less. The satisfaction is not with respect to installation of capacitors manufactured by the standard manufacturers marked by ISI specifications. The satisfaction under sub-clause (b) is with respect to installation of appropriate ratings. In fact, in our opinion, the Hoard will be rendering free service to the consumers by providing for inspection of the capacitor by an Assistant Engineer in order to find out as to whether the same is of appropriate ratings or not. 39. Another objection raised by the petitioners is with regard to the provision of clause 16.7 in the tariff which provides for installation of linked switch or circuit breaker and earth leakage circuit breaker. It is stated that this was introduced for the first time and, accordingly, further submitted that the liability to instal the apparatus required under this clause is of the Board for safe supply of electricity to the consumers. It is also stated that, in fact, in past also, this was being done by the Board, but now the Board wants to shift its burden on the consumers without any authority of law in this regard. Further, it was submitted that the provision for penalty at the rate of 1% of the total billed amount on the failure of installation of the said apparatus by the consumers during the period fixed is unauthorised and illegal. On the other band, learned Counsel for the Board bas submitted that these requirements are nothing but a condition of supply and the same have been made in terms of Rule 61A of the Electricity Rules, 1956, as amended in 1985, inasmuch as growing scientific advancement has created awareness and need for such safety measures since there are not parts of meter; hence, responsibility to provide the same is not on the Board. 40. Having considered all the aspects of the matter, we have difficulty in accepting the points raised in this regard by the petitioner. In fact, the learned Lawyer could, not point out any provision which would make the impugned clause requiring the consumers to instal apparatus in their own interest to prevent the wastage of electricity unauthorised.
40. Having considered all the aspects of the matter, we have difficulty in accepting the points raised in this regard by the petitioner. In fact, the learned Lawyer could, not point out any provision which would make the impugned clause requiring the consumers to instal apparatus in their own interest to prevent the wastage of electricity unauthorised. In the circumstances, the stand of the Board that the requirement under clause 16.7 is a condition of supply for which the Board is fully entitled to impose unless it is shown to be wholly irrational and have no bearing with the supply of the electricity cannot be said to be unjustified. As a matter of fact, the petitioners have not shown anything to hold that the same is wholly irrational and has nothing to do with the supply of electricity. 41. Mr. Pawan Kumar Rajgarhia learned Counsel appearing in C.W.J.C. No. 8214 of 1991, however, submitted that the provision for average charging in case of defective meter under clause 16.8 of the new tariff is also ultra vires and wholly illegal. According to him clause 3(c) of the agreement provides for charging in case of defective meter on the basis of average charging of the present three months, whereas, under the new tariff in the event of meter being out of order, the consumption of that month/months is to be assessed on the average consumption of the previous three months from the date of meter being out of order or the average consumption for the corresponding three months of the previous year or the consumption of the minimum guarantee charge, whichever is highest and this shall continue until the meter is replaced/rectified and so far as the fuel surcharge, power factor surcharge and electricity duty are concerned, they shall be levied on consumption so calculated. This, according to the learned Counsel, is wholly irrational and unreasonable.
This, according to the learned Counsel, is wholly irrational and unreasonable. In reply, the learned Counsel for the Board has rightly submitted that the provision for charging on the average etc is only to ensure that the moment the meters are found nonfunctional, the authority is immediately given an information about the same so that the charging may be done on such a basis which is rational and, at the same time, it is to discourage deliberate breakage/tampering with the meters by rendering such acts unbeneficial and for that these alternatives have been provided as a mode of calculation in the case of defective meter and to see that no honest consumer suffers adversely. On a consideration of the relevant provisions and other facts and circumstances, we do not find any substance in the submission of Mr. Rajgarhia that the provision of average charging in case of defective meter under clause 16.8 of the new tariff is ultra vires or illegal. 42. In the result, the writ applications are allowed in part in the following terms: (a) The objectional part of clause (2) of the impugned tariff notification by which the revised tariff is sought to be made effective retrospectively is quashed and it is held that the revised tariff shall be made effective from the date it was published in the Gazette and (b) a part of sub-clause (b) of clause 15.2 of the impugned tariff whereby a provision has been made for payment in respect of energy charge on monthly basis is also quashed." 43. These applications are finally disposed of.